critical marketing-xu

Critical Thinking on STP ModelModule: MN5051 Marketing- A Critical IntroductionCandidate Number：1203800Date of Submission: 23/01/2012Word Count: 19876Marketing theory is important to companies as it guides the managers to make right decisions in the marketing. But it is a theory developed from the practice. So as the time changes, competition situation becoming fierce, computer and internet technology developing, the consumers minds, preferences and spending habits different from past times, the old and traditional marketing theories becoming a little obsolete and not make sense any more (Ardley 2011). We must critically evaluate the effects of the theories today and apply them in a way that can adapt to the modern marketing now. This paper discusses in detail the implications of Kolters STP model, with examples to prove each point. And then it brings forward how to effectively make the decision of positioning.The Positioning is rated as the concept which has the biggest impact on the USA marketing theory. But now the traditional marketing, which is based on 4P (product, price, place and promotion), is having problems in good positioning. The companies which follow the traditional marketing method did not find it competitive in its market. But according to Kolter, if a company makes the right product, price it properly, use appropriate channels to sell it and deploy good promotion, the company can win market share and make profit in the market (Burton 2001). But as the competition becoming fierce, the wide popularity of the marketing theory and knowledge, the quick imitation of the new innovation, people find that the traditional marketing doesnt work any longer. Many companies, like Bird, TCL and Lenovo in China, suffer the pain that it just taken place for several years from the brilliant rise in the market to meeting big difficulties and bottleneck. What makes them more upset is that they are on the same track, that is to say, they are striking similar to each other in the marketing failure. This is a reflection that the traditional marketing is meeting crisis.The main reason for the phenomenon is that it is an age of strategy now. But strategy is the weak link in the traditional marketing (Tadajewski 2011). The essence of strategy is the right positioning, which refers to providing the unique values and experiences to the consumers to obtain a unique position in the consumers minds and thus increase market share and make profits.Kolter also addresses positioning and absorbs it as one step of its strategic marketing model 4Pprobing, partitioning, prioritizing and positioning. Another express of his idea is STP- segmentation, targeting and positioning (Gordon 2011). The positioning here means find the most important difference from the competitors in the targeted market (Gordon 2011). Based on the unique difference, develop the strategy and execute the 4P marketing mix to realize the positioning. Kolter states that all marketing activities are based on STP. But it is the STP which makes the positioning a thorough failure in todays marketing (Burton 2001). This is because that the target marketing should not be derived from the market segmentation, it is actually formed by the wise positioning. In other words, the market a company faces is no longer the fixed consumer population which can be divided into certain parts, but those who have their own unique perception. In todays age, if a company still select a target market and make the positioning in it, it will definitely be eliminated from the market by its competitors who have new marketing concepts and ideas. The following three paragraphs will explain in detail why the Kolters STP theory cannot form the right positioning from segmentation, targeting and positioning.Segmentation is obsolete to todays market. The concept of segmentation is brought forward in 1950s, a time which is much simpler than todays market situation. There are still many ways of segmentation in the textbooks, but they are not suitable now. The reason is that todays consumer have changed, they are becoming more and more contradictory, changeable, personalized and multi-faced (Ardley 2011). They are out of the traditional classification of demographic and psychological models. As a result, although the research of consumer behaviours and psychological research are much complex today, the segmentation methods are various, the expenses on the marketing research is much higher, the values and gains are not satisfactory compared with the expenses. Another reason for the ineffectiveness is that a company uses the same segmentation tool as its competitors (Gordon 2011). They look in the same perspective in the market. The result is that the target consumers selected by each company is almost same. So the marketing segmentation is in a helpless embarrassment. It is perfect in theory, but in practice, the application only results in little differences in tactical level. To the consumers, the little and complex differences only lead to confusion. For example, in the refrigerator industry in China, various refrigerators put their attention to the preservation function-The sterilization from New Fly, the original fresh from RongShen, the zero degree preservation from Siemens, and Photo catalyst fresh from Meiling. But no one will believe that consumers are buying refrigerators because of its preservation technology.STP theory has bigger flaw in targeting stage. Segmentation is doing analysis to the chosen marketing requirements. When choosing the target market, one important evaluation is the marketing scale, that is, how big the market is (Yaprak 2008). But the problem is that even the consumers do not know what they will buy when they have more choices in future, when new products are developed. So a potential market might be abandoned as it seems small in scale for the present (Crane & Desmond 2002). An example can prove this effectively. In 1959, when Xerox introduced its copier numbered 914, it wanted to sell the patented product to IBM due to financial pressure. But after a market research by a consulting firm hired by IBM, a conclusion had been drawn that even the existing thermal paper copier market are replaced totally by the new product, no more than 5,000 machines would every year, and the profit cannot even offset the investment on the facility to make machines. So IBM rejected the business and it becomes the biggest decision failure in IBM history. Xerox did not believe the research result and persist to bring it to the markets. Only after several months, it is praise as the most successful product in USA market by Fortune. Doctor Drucker is also opposed to the product that he said if the development of household lighting system relies on the marketing research, highly complex kerosene lamps will be used in each room today. So segmentation often makes the decision-makers lose potential marketing opportunities and further miss the chance to make innovative products.The positioning in Kolters theory also doesnt make sense today, as the positioning is based on the competitive situation of the market, not on the competitive situation in the consumers minds. Its result is that the positioning a company defined is the differences which marketing staffs recognize, the consumers do not think the same way (Levy 2002). Kolter said that a company can have better performance by offering goods better or newer or cheaper or in a quicker way. He also said that if a company does better in certain activities than its competitors, it gains the competitive advantages. This logic seems powerful and similar to the peoples usual ideas, so it raises enthusiasm and companies begin to do bench marketing and catch up the pre-set competitors (Perrien, Filiatrault & Ricard 1993).They ignored that: the better a company operates in traditional marketing, the same their strategies becomes. There are many kinds of commodities in the market, but they are almost same according to the consumers. Then all the competitors are imitating each other in the same industry, they make more profit by price battle so the profit is damaged and the industry scale is destroyed as too many companies compete in one narrow industry space. Japanese electronics industry shows the case. Comparing the financial performance of ten years from 1994 to 2003, Dells sales account only 1/14 of the combined sales of six Japanese companies: Hitachi, Panasonic, Sony, Toshiba, Fujisu and Sanyo. But the profit Dell made is four times of the total profit of the six companies. Porter wrote a book called Japanese still competitive criticizing that Japanese electronics companies compete without unique strategies and just have wars against each other with same products.Kolter had recognized the implications of his theory, but as the theory is logical, Kolter does not change it (Meldrum 1996). But marketing is a subject based on practice; The STP theory is useless now in the creative marketing activities. But how should the current companies do the right positioning? The answer is selecting the target market based on the positioning of the brand. Positioning is competitiveness-oriented and the premise of positioning is finding the competitors. By recognizing the position the competitors occupied in the consumers minds, find out a valuable place that is not occupied in the consumers minds. Then clearly convey the information consistently by marketing activities to occupy this valuable place. This way goes effective in todays positioning age.Two famous cases in China can prove this. Wanglaoji is a brand of soft drink which has the function of preventing heat in body. If using STP, Wanglaoji will be never developed, as all the herbals have the functions of preventing the heat in bodies, and they will not wait for Wanglaoji to occupy the market. So segmentation will of no help in its positioning. In fact Wanglaoji make its name by the opposition positioning. The common soft drinks have the function of cooling and easing thirsty. Wanglaoji thinks the opposite. It addressed the idea that it can prevent heat in body, which makes itself distinct in the fiercely competitive market and easily win the consumers favour. Note the sequence here, positioning goes first, no segmentation and target market selection is required prior to positioning. Another famous Dairy brand Mengniu win its market share by propaganda that Learn From Yili (the most famous Dairy brand in China when Mengniu is established), TO be the secondary Dairy Brand in China. It succeed in a time when Yili is the only brand wining the recognition worldwide. STP will never help here.In a conclusion, in positioning, STP is an out-of-date model. It doesnt mean that segmentation and targeting is no longer important. It address that positioning should not go after the two (Perry 2000). After the positioning is done, a company should choose the target market and do the segmentation with considering of its resources to develop tactical approach and win in the market. The essence of the positioning is reading the consumers mind and recognizing what the competitive situation in their minds (Layton 2011). If only following the STP model, no matter how perfect the positioning planning is, it will never win the consumers favour. The consumers of todays age is contradictory and easy to change, without a clear and stable positioning, the consumers will not remember the brand. The best positioning is that when a consumer has a demand of some property, the brand is the preferred one which comes to the consumers mind. For example, Volvo stands for security, Benz stands for prestige, and BMW stands for good driving experience.This essay critically discusses the theory of positioning. Positioning was, is and will be the critical concept in marketing. But it has found that the traditional marketing model STP- segmentation, targeting and positioning is no longer an effective way in todays market. This is because the market a company faces is no longer the fixed consumer population which can be divided into certain parts, but those who have their own unique perception. Positioning based on segmentation will cause price battle and no difference in product as companies uses the same segmentation tool as competitors in the same market. Targeting stage takes the marketing scale into consideration, which might exclude potential markets out of consideration. The positioning in the STP model also did not make sense as the positioning is based on the competitive situation in the market, not the competitive situation in the consumers minds. So the STP doesnt fit the todays market in positioning. The effective way of positioning is find the competitors positions in the consumers minds, and then seek the areas which are valuable and not occupied by others yet. 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